Financehttp://www.beehive.govt.nz/taxonomy/term/6243/feed
enWellbeing of New Zealanders at the heart of Budget prioritieshttp://www.beehive.govt.nz/release/wellbeing-new-zealanders-heart-budget-priorities
Improving the wellbeing of current and future New Zealanders will be the focus of Budget 2019, Finance Minister Grant Robertson said on Thursday.
“The Coalition Government is doing things differently. We want a wellbeing focus to drive the decisions we make about Government policies and Budget initiatives. This means looking beyond traditional measures - such as GDP - to a wider set of indicators of success,” Grant Robertson said.
“Under the Government’s wellbeing approach, the development of Budget priorities represents a new way of working and of thinking about how we develop our priorities as a Government, and measure our success as a country,” Grant Robertson said.
“Using the Treasury’s Living Standards Framework (LSF), evidence from sector-based experts and the Government’s Science Advisors, and with collaboration among public sector agencies and Ministers, we have identified five priorities for the Wellbeing Budget,” Grant Robertson said.
The five Priorities for Budget 2019 are:
Creating opportunities for productive businesses, regions, iwi and others to transition to a sustainable and low-emissions economy
Supporting a thriving nation in the digital age through innovation, social and economic opportunities
Lifting Māori and Pacific incomes, skills and opportunities
Reducing child poverty and improving child wellbeing, including addressing family violence
Supporting mental wellbeing for all New Zealanders, with a special focus on under 24-year-olds.
“These priorities are focussed on the outcomes that will make real improvements to New Zealanders’ wellbeing,” Grant Robertson said.
“All Ministers and agencies will be collectively responsible for delivering on the priorities. For the first time, they are being tasked with developing their own Budget bids through the lens of the priorities. They are being asked to work together, across portfolios, on initiatives that will deliver the outcomes identified by the priorities.
“New Zealanders will see a difference with next year’s Budget. It will show how we are building an economy that is more productive, more sustainable and more inclusive,” Grant Robertson said.
“Strong economic fundamentals and sustainable economic growth remain integral to New Zealand’s success but they are a means to an end, not an end in themselves. We are widening our Budget focus to look at the wellbeing of our people, the health of our environment and the strength of our communities,” Grant Robertson said.
The guidance issued to Ministers and departments can be found here: https://treasury.govt.nz/publications/budget-policy-statement/budget-policy-statement-2019Thu, 13 Dec 2018 13:10:32 +1300beehive.govt.nz106650Forecasts show solid economic fundamentalshttp://www.beehive.govt.nz/release/forecasts-show-solid-economic-fundamentals
The New Zealand economy will continue its momentum over the next few years, underpinned by investment, productivity and wage growth, Finance Minister Grant Robertson says.
“The Treasury’s Half Year Economic and Fiscal Update (HYEFU) released today shows that the economy is healthy and the Coalition Government is managing the books carefully in accordance with the Budget Responsibility Rules. We’re running surpluses, controlling expenses and keeping on top of debt,” Grant Robertson said.
“This is important given the warnings of growing risks around the volatility of the international growth outlook, which could feed through to the New Zealand economy.”
Economic outlook
“The forecasts released today show the Coalition Government’s plan to help transition the economy to more productive, sustainable and inclusive growth is working,” Grant Robertson said. They show:
Positive labour productivity growth after five years of negative growth
Wages forecast to increase by over 3.3% per year across the forecast period
Business and residential investment growth around 4% per year
Export growth around 3% per year, and the terms-of-trade remaining strong
Unemployment to stay low around 4% as businesses continue to hire
“These factors will drive GDP growth of about 3% per year over the next couple of years, according to the HYEFU forecasts. This represents strong growth at a time when the economy is running at capacity, and is in line with other forecasters. Over the next three years, the New Zealand economy is forecast to grow stronger than Australia.
“Growth is expected to revert to trend in the out-years, as is normal in the Treasury’s forecasts. This is largely due to its net migration forecast dropping back to the long-run average of 25,000 by the end of the forecast period.”
Fiscal outlook
“The HYEFU forecasts show continued careful management of the Government’s books on behalf of all New Zealanders, and that the Budget Responsibility Rules are being met,” Grant Robertson said. They show:
The OBEGAL surplus is forecast to rise from $1.7 billion in 2018/19*, to $8.4 billion in 2022/23
Core Crown expenses are forecast to drop from 29.5% of GDP in 2018/19 to 28.3% of GDP in 2022/23
Net debt is forecast to be 19.0% of GDP in 2021/22 (the year in which the 20% target has to be reached).
“Our careful management of the Government’s books gives us the ability to make important investments in public services for all New Zealanders. We’re also continuing our plan to invest a net $42 billion in capital and infrastructure over the next five years, which is before further Budget decisions are made.”Thu, 13 Dec 2018 13:08:46 +1300beehive.govt.nz106648Making sure taxpayer dollars are spent wiselyhttp://www.beehive.govt.nz/release/making-sure-taxpayer-dollars-are-spent-wisely
The Coalition Government is continuing to prioritise expenditure to ensure that we’re investing in the public services that matter to New Zealanders, Finance Minister Grant Robertson says.
“We have a responsibility as Government to ensure taxpayer dollars are spent wisely. This means they are spent on the priorities that New Zealanders hold important and represent value for money,” Grant Robertson said.
The 2019 Budget Policy Statement reconfirms operating allowances of $2.4 billion per year over the next four Budgets. This is the new spending that will be available at Budget 2019 for new initiatives and to meet growing demand for high-quality public services.
“Every new Budget bid is carefully scrutinised by the Treasury and – from this year – filtered through the Budget priorities to ensure that they represent value for money, fit with the Coalition Government’s objectives and improve New Zealanders’ wellbeing.
“It’s clear that this Coalition Government has different priorities to the previous one. After nine years of a different Government, it’s not surprising that there would be some spending not aligned to our priorities that can be reprioritised to higher value spending.
“We undertook a similar prioritisation process ahead of Budget 2018 and said back then that this exercise will be ongoing.
“Budget 2019 guidance sent to all departments and Ministers in September outlined how the process is continuing. Before they put in bids for new spending initiatives, Ministers and their departments were asked to undertake a review of spending within their portfolios to identify at least one per cent within their baselines that is not aligned with the Government’s aims, or is of the lowest priority for that portfolio.
“This review does not cover capital expenditure, benefits or related expenses, cost recovered revenue, revenue dependent appropriations and memorandum accounts, and Permanent Legislative Authority funding.
“We will assess the material that Ministers and departments put forward before deciding whether resources can be better spent, in time for Budget 2019.
“This is a responsible Government in action working to ensure all aspects of baseline operating spending are of high value, and that this spending fits with the Government’s objectives,” Grant Robertson said.
The guidance issued to Ministers and departments can be found here: https://treasury.govt.nz/publications/guide/budget-2019-guidance-agenciesThu, 13 Dec 2018 13:06:41 +1300beehive.govt.nz106646Finance Minister welcomes release of Living Standards Framework Dashboardhttp://www.beehive.govt.nz/release/finance-minister-welcomes-release-living-standards-framework-dashboard
Finance Minister Grant Robertson has welcomed the Treasury’s release of its Living Standards Framework (LSF) Dashboard.
The Dashboard is a tool created by the Treasury, within its broader Living Standards Framework, to help shape policy advice. It contains data measures across 12 areas (such as health, housing, safety, and social connections) that reflect the four key components of the LSF that determine inter-generational wellbeing (natural, human, social, and financial and physical).
“This tool will be used alongside other measures to support the Coalition Government’s Wellbeing Budget that will be released in 2019,” Grant Robertson said.
“Next year’s Budget will be a significant change from previous ones. Our Wellbeing Budget will demonstrate that we are a Government committed to building an economy that is more productive, more sustainable and more inclusive,” Grant Robertson said.
“In doing this, we are making sure that we don’t just look at New Zealand’s financial health, but also at the wellbeing of our people, the health of our environment, and the strength of our communities,” Grant Robertson said.
“The data in the LSF Dashboard shows the current and future wellbeing of New Zealanders broken by ethnicity, age, gender, region, family time and deprivation area over time,” Grant Robertson said.
“I will be able to say more on the five Budget priorities when I release the Budget Policy Statement next week, but I have already signalled mental health wellbeing will be one,” Grant Robertson said.
“The Treasury says the LSF Dashboard version released today is the first of an evolving tool, so understandably there are still some gaps and issues to address, in particular on child wellbeing, cultural wellbeing and capturing a Te Ao Maori view,” Grant Robertson said.
“The Treasury will continue to update the Dashboard,” Grant Robertson said.
Tue, 04 Dec 2018 13:52:56 +1300beehive.govt.nz106518Crown accounts reflect strong economic fundamentalshttp://www.beehive.govt.nz/release/crown-accounts-reflect-strong-economic-fundamentals
New Zealand’s strong economic fundamentals continue to show through in the Crown accounts, Finance Minister Grant Robertson says.
The Treasury today released the Crown accounts for the four months ended 31 October.
“The strong jobs market, higher-than-expected residential investment and the strength of the corporate sector continued to show through in the accounts. Net debt also remained below the Budget 2018 forecast,” Grant Robertson said.
“It’s still early in the new financial year and, as with the September results, readings earlier in the year can show an OBEGAL deficit due to the different timings of revenue and expenses.
“The OBEGAL deficit of $258 million is similar to the same time last year as Core Crown expenses came in 1.2% ($344 million) above forecast. Half of this variance was due to the top down adjustments the Treasury makes through the year, while the remainder was spread over a number of departments. It should be remembered that expenses at the end of the previous financial year came in below forecast, meaning there might be reversals early in the current 2018/19 year.
“Core Crown tax revenue over the four months was 0.8% above the Budget 2018 forecast. Source deductions – mainly PAYE – were 1.5% higher than expected due to the strong jobs market, as indicated by the ten-year low unemployment rate of 3.9%. GST was 1.7% above forecast due to stronger-than-forecast residential investment.
“The accrual measure of corporate tax was 5.5% below forecast, partly due to timing differences. The Treasury says they expect this variance to decrease over the year. The less volatile receipts measure of corporate tax was 5.9% above forecast, indicating strong underlying business fundamentals.
“Net debt at the end of October was 21.1% of GDP, versus the Budget 2018 forecast of 21.6%.
“These accounts were the last to be compared against the Budget 2018 forecasts. The next set will be measured against more up to date forecasts being released on 13 December in the Half Year Economic and Fiscal Update.”Fri, 30 Nov 2018 10:12:14 +1300beehive.govt.nz106480New report reveals contribution Pacific New Zealanders make to economyhttp://www.beehive.govt.nz/release/new-report-reveals-contribution-pacific-new-zealanders-make-economy
Finance Minister Grant Robertson and Pacific Peoples Minister Aupito William Sio have today launched a report showing the significant contribution Pacific New Zealanders make to the economy.
The Treasury report, The New Zealand Pacific Economy uses Treasury’s Living Standards Framework to identify the economic footprint of Pacific communities within the economy.
“The report reveals Pacific peoples are contributing significantly to the economy despite some of the poor health, housing, education and employment outcomes experienced by many in their communities,” Grant Robertson says.
Key findings from the research include:
Pacific individuals and businesses contribute $8 billion to New Zealand’s annual Gross Domestic Product (GDP) using the income measure.
Pacific workers earned $6.6 billion in the 2017 financial year, equating to six percent of the income of all New Zealanders. However, the average income was $40,300, compared to $53,500 for non-Pacific.
The spending of Pacific households contributed $10.4 billion to the expenditure measure of annual GDP.
Annual household income is estimated to be $12 billion from 101,000 households.
There are approximately 1,500 Pacific business employers and 500 not-for-profit organisations with assets totalling $8.3 billion. Arising from these assets, the total production GDP (or value added) of Pasifika in New Zealand was estimated to be $3.1 billion annually.
Pacific New Zealanders across the country spent 27,000 hours per week doing voluntary activities.
“While the research explores the monetary value of the Pacific economy, the Government recognises that for Pacific people wealth is defined more broadly and includes knowledge, family, faith, education, health, and culture. We are taking these broader aspects into account as we develop our Wellbeing Budget,” Grant Robertson says.
“The report highlights the importance of increasing tertiary education for the growing youthful Pacific population. Improving Pacific people’s education success will lead to increased employment, higher incomes, home ownership and overall health and wellbeing for all our people,” Aupito William Sio says.
"Imagine how great our collective contribution would be if we could eliminate the disparities and inequalities that exist in health, housing, education, employment and incomes.
“The report’s findings are in line with feedback from conversations with more than 2,500 Pacific people as part of the Government’s work to refresh the Pacific Vision. This project has identified Pacific languages, cultures and identities, economic development and income, health and wellbeing, and youth as priority areas for action,” Aupito William Sio says.
The report was officially launched at the Pacific Aotearoa Summit in Auckland today along with the refreshed Pacific Vision, and a reflections report.
The report can be accessed here.
More information about the Summit, including live-streaming of the event, is available at www.pacificaotearoa.org.nz.
Tue, 13 Nov 2018 09:37:33 +1300beehive.govt.nz106274Future of Work Forum focus on SMEs, technological disruptionhttp://www.beehive.govt.nz/release/future-work-forum-focus-smes-technological-disruption
The second meeting of the Future of Work Tripartite Forum focussed on how to remove barriers faced by small and medium enterprises (SMEs), and the issue of technological disruption, Finance Minister Grant Robertson says.
The Forum is a partnership between Government, business (represented by Business NZ) and workers (represented by the Council of Trade Unions). It was set up to shape the Government’s work supporting New Zealand workers and businesses to confidently face the rapidly changing nature of work.
Today’s meeting included presentations from McKinsey Senior Partner and Business Advisory Council member Andrew Grant, and NZ Tech CE Graeme Muller on technological disruption in the business sector.
“Globally we are seeing a massive growth in technologies that were once considered science fiction – things like robotic surgery, drones, artificial intelligence, cellular agriculture, inductive transfer and autonomous vehicles. All of these technological changes will make us more productive but they are also having significant impacts on the way we work,” Grant Robertson said.
Council of Trade Unions President Richard Wagstaff said: “A key element of adapting to this change is ensuring that we have the right skills for the future. We need to understand what measures will need to be taken to prevent technological unemployment and the aggravations of serious skills shortages in key industries such as manufacturing.”
The Forum confirmed $250,000 of funding from MBIE would be put towards supporting the initial component of the Skills Shift in Manufacturing Initiative created and led by the NZ Manufacturers Network. This initiative is to identify the skills shifts needed in manufacturing to support the workforce to take on the opportunities of technological change.
The Forum also discussed the impact of the changing nature of work on SMEs. Auckland Chamber of Commerce CEO Michael Barnett gave input on barriers faced by SMEs, some of which are unrecognisable given the changing nature of work.
Business NZ CEO Kirk Hope said: “While a lot of the focus of technological disruption is on the larger businesses driving headline-grabbing changes, businesses of all sizes can drive and benefit from the changing nature of technology and work. It’s vitally important – particularly in New Zealand – that Government, businesses and workers approach this future together.”
The Forum also received presentations from Research, Science and Innovation Minister Megan Woods on the Government’s Just Transitions Unit, and from Workplace Relations Minister Iain Lees-Galloway on progress around the High Performance High Engagement initiative.Mon, 12 Nov 2018 18:08:25 +1300beehive.govt.nz106262Unemployment drop another sign of strong economic fundamentalshttp://www.beehive.govt.nz/release/unemployment-drop-another-sign-strong-economic-fundamentals
Today’s drop in the unemployment rate to its lowest level in over a decade is another real example of New Zealand’s strong economic fundamentals, Finance Minister Grant Robertson says.
The unemployment rate fell to 3.9% in the September 2018 quarter, the lowest since June 2008. At the same time, the employment rate rose to a record high of 68.3%.
“On entering Government we said our economic plan would focus on ensuring all New Zealanders benefited from growth, and set the target of a 4% unemployment rate within our first term.
“Our economic plan backs businesses to invest and hire. We’re making record transport infrastructure investments throughout New Zealand to boost productivity and exports; we have a strong focus on regional development through the Provincial Growth Fund; and we are supporting businesses to close skills gaps through policies like Mana in Mahi/Strength in Work, micro-credentials and fees-free.
“On top of this, our $1 billion investment to support business research & development, the $100 million Green Investment Fund, and Trade for All agenda will see investment in new technologies, and open up new markets for our exporters.
“We’re also changing the underlying regulatory settings to encourage investment into the productive economy. We’re heading away from growth driven by property speculation and population increase and transitioning the economy towards productive, sustainable and inclusive growth.
“It is the nature of statistics such as the unemployment figures that there will be some fluctuation in coming quarters. But today’s data show the underlying fundamentals of the economy, the labour market and businesses are strong,” Grant Robertson said.Wed, 07 Nov 2018 13:29:35 +1300beehive.govt.nz106212Half Year Economic and Fiscal Updatehttp://www.beehive.govt.nz/release/half-year-economic-and-fiscal-update
The Treasury’s 2018 Half Year Economic and Fiscal Update (HYEFU) will be released on Thursday, 13 December, Finance Minister Grant Robertson says.
The Coalition Government will publish the 2019 Budget Policy Statement at the same time, outlining the priorities for Budget 2019.
Further details on arrangements for the release will be made available by the Treasury in due course.Tue, 06 Nov 2018 15:19:10 +1300beehive.govt.nz106188Banks on notice to lift their gamehttp://www.beehive.govt.nz/release/banks-notice-lift-their-game
Banks must lift their game to ensure the rights of customers are protected, Commerce and Consumer Affairs Minister Kris Faafoi says.
A review of bank conduct, released today by the Financial Markets Authority (FMA) and Reserve Bank of New Zealand (RBNZ), identifies instances of poor conduct by bank staff and weaknesses in bank processes to manage them.
“We are not happy to hear that there are problems, but by identifying them we now have an opportunity to fix them. New Zealand customers should get fair treatment and their needs must be put first,” said Kris Faafoi.
“It’s important banks do much better at identifying problems and risks in their business and fixing them before they become a much bigger problem.”
Minister of Finance Hon Grant Robertson said that dealing with the problems identified in the report was critical to ensure New Zealanders have confidence in their banking system.
“Any weaknesses in how banks manage the way they behave is a concern.
“This report highlights why we must remain vigilant to the risks that Australian customers are facing. Banks need to provide a service that’s acceptable by New Zealanders and my hope is they will do this by placing customers at the heart of their decision making,” said Grant Robertson.
“This is not an end, rather a beginning to ensure banks deliver on the privilege of being licenced to operate in this country.”
The FMA and RBNZ will provide specific individual feedback to each bank later this month. The banks will then have until March 2019 to report back to the regulators and provide plans for addressing the feedback.
The Government would also be looking closely at the findings from the Australian Royal Commission, anticipated in February 2019, and will be asking the RBNZ and FMA to study the final report to determine if further action is needed in New Zealand.
Kris Faafoi said the Government would be taking on board the report’s recommendations on the regulatory environment for bank conduct and will determine if regulations need to change.
A programme of work is already underway to improve the regulation of New Zealand’s financial system and to prioritise customer interests. This includes the Financial Services Legislation Amendment Bill to strengthen regulation of financial advice, changes to the Credit Contracts and Consumer Finance Act to target irresponsible lending, and a review of insurance contract law.
“Ultimately, New Zealand banks need to step up and take greater responsibility for their systems and processes, so that consumers can have confidence that their finances are in safe hands,” said Kris Faafoi.
Media Contact Hon Kris Faafoi : Lindsey Birnie 021 814 025
Media Contact Hon Grant Robertson: Ellen Read 021 562 332
Mon, 05 Nov 2018 14:07:47 +1300beehive.govt.nz106160NZ best country in the world for doing businesshttp://www.beehive.govt.nz/release/nz-best-country-world-doing-business
Recognition today that New Zealand continues to have the most business-friendly environment in the world is another real example of the strength of our underlying economic and business fundamentals, Finance Minister Grant Robertson says.
New Zealand maintained top spot in the Doing Business 2019 report released by the World Bank today. The report compares regulations affecting businesses in 190 countries, including settings for starting a business, dealing with construction permits, access to credit, trade, and protection of minority investors,” Grant Robertson said.
“The report uses quantitative data which is current in 2018, and specifically notes that: “The top three economies this year—New Zealand, Singapore and Denmark—exemplify a business friendly environment.”
“Within the ten topics used to determine New Zealand’s score, the report showed improved sub-scores this year for ease of starting a business, dealing with construction permits, getting electricity and registering property.
“It’s important that our regulatory settings are right. It’s also important for Governments to support businesses to grow. Since coming into office the Coalition Government has engaged with the business community and announced a number of growth-friendly policies aimed at driving more productive, sustainable and inclusive growth.
“Our policies announced to date include the $1 billion tax incentive for businesses engaging in R&D, the $1 billion per year Provincial Growth Fund, the $100 million Green Investment Fund, support for businesses with the costs of taking on apprentices through Mana in Mahi/Strength in Work, and a series of reforms to support small and medium enterprises like e-invoicing,” Grant Robertson said.Thu, 01 Nov 2018 16:34:21 +1300beehive.govt.nz106122Next steps for a modern Reserve Bank and financial frameworkhttp://www.beehive.govt.nz/release/next-steps-modern-reserve-bank-and-financial-framework
The Coalition Government’s work to ensure New Zealand’s financial system is well regulated within a modern framework progressed today, Finance Minister Grant Robertson says.
“The Reserve Bank Act has been in place for nearly 30 years. Over that time, the scope, focus and intensity of regulation and supervision has evolved. Alongside this, changes to the Reserve Bank’s statutory framework have occurred through a series of separate, targeted amendments rather than through a comprehensive work programme,” Grant Robertson said.
“Now is the right time to do that work to ensure we have a fit for purpose financial stability and regulatory framework for the coming decades.
“Phase 2 of the Review of the Reserve Bank Act opened today. This work will ensure the Act aligns with what the Government considers will provide a strong, flexible and enduring regulatory framework that enjoys broad public and industry support,” Grant Robertson said.
The work is being led by a joint Treasury-Reserve Bank team. The Government is being advised by an independent expert panel. More details are available on the Treasury’s website here. The scope and terms of reference for Phase 2 can be found here.
The Phase 2 work is separate from the FMA-Reserve Bank review of the conduct and culture of New Zealand financial services entities, which is due to be released next week.
The legislation implementing Phase 1 of the Review – improving New Zealand’s monetary policy framework – is currently progressing through Parliament.Thu, 01 Nov 2018 09:33:41 +1300beehive.govt.nz106114Super Fund’s 15th birthday a reminder of the need for intergenerational investmentshttp://www.beehive.govt.nz/release/super-fund%E2%80%99s-15th-birthday-reminder-need-intergenerational-investments
Today’s celebration of the New Zealand Super Fund’s 15th anniversary is an opportunity to reflect on why the Fund was created, and why it was important that the Coalition Government resumed contributions, Finance Minister Grant Robertson says.
At an event in Parliament on Wednesday evening, Grant Robertson acknowledged the vision of the Super Fund’s creators, led by former Finance Minister Michael Cullen. He also acknowledged the Fund’s managers for their work generating world-leading returns on behalf of all New Zealanders.
“The Cullen Fund is an example of an intergenerational policy where the Government of the day chose to look past the short-term election cycle and actually put in place a structure to ensure future taxpayers were not unfairly burdened by costs they knew were coming,” Grant Robertson said.
“The Fund was set up to allow the Government to ‘save now’ to smooth the costs of an ageing population across generations. The contributions we are making, and the returns generated by the Fund’s investments, will help future Governments with the costs of providing universal super.
“The Super Fund commenced investing in 2003 with $2.4 billion in cash. As at 30 September 2018 it was worth $41 billion. Its independent managers have produced an average annual return of 10.44%. This is well above the ‘reference portfolio’ the Fund is marked against, meaning it has delivered $7.9 billion in additional value than if the initial capital had just been invested in a passive reference benchmark.
“It’s unfortunate that, despite the Fund’s success and the need to save to allow for universal super in the future, the previous Government made a political decision to stop contributing to the Fund, even once they had returned to surplus. The Fund itself has produced figures showing this short-term thinking has cost future taxpayers $24.1 billion.
“On coming into office, the Coalition Government resumed contributions within our first 100 days. It was a proud moment hitting the button to make the first payment alongside the Prime Minister back in December. Over five years, we are set to invest $7.7 billion. This, along with the Fund’s expected performance, mean it is now forecast to grow to a size of $64 billion by 2022/23.
“Our decision to resume contributions will not only benefit future generations by helping to cover the costs of an ageing population. Over the next few decades, the Fund’s independent managers are set to continue investing in New Zealand businesses and infrastructure projects which will drive productivity gains and economic growth, while providing decent returns for the Fund. These are long-term investments in our future,” Grant Robertson said.Wed, 31 Oct 2018 18:14:12 +1300beehive.govt.nz106110NZ Post chair resignshttp://www.beehive.govt.nz/release/nz-post-chair-resigns
Jane Taylor is leaving the board of New Zealand Post, Finance Minister Grant Robertson said on Wednesday.
“Jane has decided to resign from the NZ Post board, and I have accepted her resignation,” Grant Robertson said.
“We’d like to thank Jane for her significant work in setting up NZ Post’s strategy, and guiding the organisation through a significant period of change,” Grant Robertson said.
Current deputy chair Jacqueline (Jackie) Lloyd has been appointed NZ Post acting chair.
Wed, 31 Oct 2018 17:24:38 +1300beehive.govt.nz106106Crown accounts track in line with Budget forecastshttp://www.beehive.govt.nz/release/crown-accounts-track-line-budget-forecasts
OBEGAL, revenue, expenses close to Budget forecasts in first 3 months of 2018/19
Corporate tax receipts in line with forecast, up 8.2% from last year
Net debt below forecast at 30 September 2018
The first set of Crown financial statements for the 2018/19 year show the Government accounts are tracking in line with the Budget 2018 forecasts, Finance Minister Grant Robertson says.
“The Treasury today released the Financial Statements of the Government for the first three months of the new financial year, from 1 July to 30 September 2018. As with other years, these initial readings early in the financial year can be variable due to differences in the timing of revenue and expenses, and corporate reporting structures,” Grant Robertson said.
“The Operating Balance before Gains and Losses (OBEGAL) was close to forecast at a $0.3 billion deficit over the three months. A small deficit is normal at the start of the financial year. This is because monthly tax revenue ramps up as the year progresses, while expenses are more evenly spread out. The Treasury advises that the early deficit is set to reverse out into a surplus in the coming months.
“Core Crown expenses were close to forecast, at 1% below expectations, while core Crown tax revenue was within 0.6% of the Budget forecast.
“Within revenue, we saw some of the typical early-year variations. While source deductions and GST were slightly above forecast, in line with the strong labour market and stronger-than-forecast residential investment, corporate tax revenue – using the reported ‘accrual’ measure – was 12.3% below forecast. The Treasury advises that the September quarter accrual corporate tax result was affected by timing and accrual movements, and that the early reading is not necessarily a reliable indicator of underlying corporate profitability. The less-volatile ‘receipts’ measure of corporate tax was on forecast and is up 8.2% on the same period last year.
“Net core Crown debt stood at 20.9% of GDP at 30 September, below the Budget forecast of 21.7% of GDP. The Government is focussed on keeping net debt under control, with the Budget Responsibility Rules committing us to reducing net debt to 20% of GDP within five years of taking office. As pointed out at the release of the 2017/18 financial statements, net debt is set to fluctuate around the 20% mark.
“The Coalition Government is committed to responsible management of the Government’s books. We are running sustainable annual surpluses, keeping expenses under control and managing net debt carefully. At the same time, we are making record investments in infrastructure and public services like health, education and housing. This is a careful balance between making the important investments New Zealand needs while making sure we’re not burdening future generations,” Grant Robertson said.Wed, 31 Oct 2018 10:02:50 +1300beehive.govt.nz106096Next phase in rewrite of Overseas Investment ruleshttp://www.beehive.govt.nz/release/next-phase-rewrite-overseas-investment-rules
The Government is launching the second chapter in its rewrite of the Overseas Investment Act to ensure investments are consistent with New Zealand’s national interest.
This will also focus on reducing complexity and cutting unnecessary red tape, Associate Finance Minister David Parker said.
The first phase included the ban on foreign buyers acquiring existing homes, which takes effect on October 22, as well as measures to encourage foreign investment in forestry.
“By preventing foreigners from buying existing homes the Government has completed the most significant reform of the Act in more than a decade,” David Parker said.
“We know that steps can be taken to simplify the rules for those making productive investments in our economy, while adequately protecting our most sensitive assets including our pristine land - the envy of the world.
“In the second phase of our reform we will ensure New Zealand remains an attractive destination for beneficial, long-term foreign direct investment, while examining ways to ensure prospective foreign investments are consistent with New Zealand’s national interest.
“Many of our closest allies have the ability to block significant investments that are inconsistent with their national interests. New Zealand currently cannot,” David Parker said.
“It is likely that a broad, but rarely used, discretion to decline approval for significant foreign investment, such as infrastructure assets with monopoly characteristics, will be introduced.”
Legislation to implement the changes is expected to be completed by 2020.
The Government will consult widely on options for reform. Public consultation will take place in the first half of 2019.
The work will be led by the Treasury. Its terms of reference can be found at: https://treasury.govt.nz/publications/information-release/phase-two-reform-overseas-investment-act-2005
Tue, 16 Oct 2018 10:50:58 +1300beehive.govt.nz105920Finance Minister travels to annual IMF/World Bank and APEC meetingshttp://www.beehive.govt.nz/release/finance-minister-travels-annual-imfworld-bank-and-apec-meetings
Finance Minister Grant Robertson is travelling today to attend a series of international economic meetings and bilateral engagements in Indonesia, Malaysia and Papua New Guinea.
Mr Robertson is attending the IMF/World Bank annual meeting in Bali from October 12-13. There he will have a series of engagements including meetings with counterparts, ratings agencies and officials from the World Bank and IMF.
Mr Robertson then travels to Malaysia from October 14-15. He is meeting Malaysia Finance Minister Lim Guan Eng, Economy Minister Azmin Ali, and Youth and Sports Minister Syed Saddiq. He is also hosting a lunch with New Zealand firms in Malaysia.
Mr Robertson is then attending the APEC Finance Ministers’ meeting in Port Moresby, Papua New Guinea from October 16-18. Discussions between APEC Finance Ministers include the global and regional economic outlooks and key issues and recommendations for promoting more balanced, inclusive, sustainable, innovative and secure growth across the Asia-Pacific region.
“These meetings come at an important time for the global economy and are good opportunity for us to engage directly with our closest trading partners and discuss plans for productive, sustainable and inclusive growth,” Grant Robertson said.
Thu, 11 Oct 2018 12:54:32 +1300beehive.govt.nz105876New global economic forecasts show importance of running surpluses, paying down debthttp://www.beehive.govt.nz/release/new-global-economic-forecasts-show-importance-running-surpluses-paying-down-debt
The International Monetary Fund’s (IMF) latest global economic forecasts are a timely reminder of why the Coalition Government is running surpluses, sensibly managing debt and focussing on policies to support growth, Finance Minister Grant Robertson says.
The IMF has upgraded its growth forecasts for New Zealand compared to April, closer to the Treasury’s forecasts. While this is welcome, the broader IMF World Economic Outlook released today also shows why we need to keep a close eye on international economic developments.
“The global outlook shows a downward revision in global growth forecasts over the next two years. Global economic growth of 3.7 percent in 2018 and 2019 is down 0.2 percentage points each year compared to April,” Grant Robertson said.
“The global growth downgrade is largely due to rising international trade tensions and disappointing global activity. It’s a timely reminder of why the Government is ensuring the books are in order and strong enough to protect the economy and New Zealanders from any rainy day such as changes in the international economy.
“The IMF has recognised New Zealand’s sound economic fundamentals, with forecasts for growth of around 3% in 2018 and 2019. The upgraded view of New Zealand’s economic outlook follows the IMF’s review of Budget 2018, which included growth-friendly policies like the R&D incentive, the Provincial Growth Fund, and record transport infrastructure investment.
“While the IMF’s forecasts are slightly below the Treasury’s, they are strong compared to other advanced economies. The average forecast New Zealand growth rate over 2018 and 2019 is stronger than forecasts for Australia, the US, the Euro area, Japan, Canada and the UK,” Grant Robertson said.
In a second report released today, the IMF said New Zealand’s fiscal outlook is positive, and that the Government is expected to continue running surpluses and controlling debt.
“The IMF’s Fiscal Monitor used New Zealand as an example of good practice for fiscal management. The IMF expects the New Zealand Government’s financial position to remain better than peers including Australia, Canada, the UK, the US and the Euro area, while our debt will remain lower than these other advanced economies,” Grant Robertson said.
“The Government financial statements released yesterday confirmed our commitment to sound fiscal management. At the same time, we are making important investments including significantly increased funding of health, education, housing, family support and infrastructure.
“It’s important to remember that the Government accounts are for the year ended 30 June 2018, and the better-than-expected surplus is in part due to one-off factors. Calls for ongoing increases in spending need to keep in mind that there first needs to be confidence that the better-than-expected results will continue year after year, as opposed to just being a one-off.
“Due to the IMF’s comments today on the rising risks to the global economy, it’s prudent that we wait until the Treasury releases its next set of forecasts in mid-December,” Grant Robertson said.Wed, 10 Oct 2018 15:32:45 +1300beehive.govt.nz105866Government books show surplus, falling net debthttp://www.beehive.govt.nz/release/government-books-show-surplus-falling-net-debt
A strong surplus and falling net debt reflect a growing economy and show the Coalition Government is managing the books responsibly, Finance Minister Grant Robertson says.
The Crown financial statements for the year to 30 June 2018 are the first official check in on the Government’s commitment to run surpluses, pay down net debt and keep expenses under control.
“It’s important we run surpluses and pay down debt to make sure we are in a good position to deal with any rainy day. Economists have been warning about growing risks in the international economy, particularly due to rising trade protectionism, which we need to be well-placed to face in case this flows through to the New Zealand economy,” Grant Robertson said.
“The headline results today are ahead of the Treasury’s forecasts in Budget 2018. This was largely due to timing issues with Crown expenses, which will reverse out as that planned spending occurs early in the 2018/19 year. This means Budget 2018 spending and investment plans are on track.
“The books show we are meeting the Budget Responsibility Rules. A headline $5.5 billion surplus operating balance before gains and losses (OBEGAL) is $2.4 billion above the Treasury’s Budget 2018 forecast.
“A number of factors contributed to this result being ahead of Budget 2018 expectations. A number of one-offs led to core Crown expenses coming in 1.4 percent below forecast at 30 June 2018. The Treasury says that this was largely due to timing issues, meaning much of this variance is set to reverse out in the 2018/19 accounts. Core Crown expenses were stable at 27.9 percent of GDP.
“A strong economy contributed to core Crown tax revenue coming in 0.9 percent higher than expected in the year to 30 June 2018. Corporate tax revenue was up, due to profits for both large and small businesses being higher than the Treasury had forecast at Budget 2018. This result indicates the strength of the growing economy.
“This underlying strength of New Zealand businesses saw the number of people in employment rise by 3.7 percent over the year, while average wages rose 3 percent. These numbers show that our economic fundamentals are strong.
“The financial statements also indicate the Coalition Government’s commitment to making the important infrastructure investments New Zealand needs to unlock the growth potential of our cities and regions. At the same time, we are making up for neglected investment in critical public services in recent years.
“Net capital investment of $5.9 billion in the year was the highest since 2009 and an increase of $2.2 billion from the previous year. This included investments in hospitals, schools and state highways, while also reflecting the Coalition Government’s move to resume contributions to the NZ Super Fund.
“We are committed to a balanced approach by adopting a responsible debt reduction track. At 30 June 2018, net core Crown debt was 19.9 percent of GDP, compared to the 20.8 percent forecast in Budget 2018.
“We remain committed to the Budget Responsibility Rule that net debt will be 20 percent of GDP in 2021/22. This gives us the space required to make the critical infrastructure investments that New Zealand needs, while still building a buffer," Grant Robertson said.Tue, 09 Oct 2018 13:01:20 +1300beehive.govt.nz105846Remarks made to Mood of the Boardroom 2018http://www.beehive.govt.nz/speech/remarks-made-mood-boardroom-2018
Opening remarks:
There definitely has been a big change since I was up here last year.
It is important to note that New Zealanders did vote for a change. They voted for the change in direction that we have by bringing the three parties together that now form the Government. And they were asking us to address those big issues around housing, around child poverty, around making sure we were protecting our environment better, and around supporting our regions.
That is what the Government has been focussed on since coming in, and delivering on the changes that we promised to do.
It’s really important to remind ourselves that New Zealand is still in solid shape economically and in terms of our business environment. We’re still at the top of the ease of doing business index; the fundamentals of our economy remain sound; we are still at the top of the transparency international ratings around our freedom from corruption; we have a relatively stable financial system.
These things are important to me as the Minister of Finance, and ones that we will continue to keep our eye on.
Just as is taking the approach that we have around fiscal management. And I’m not sure that I totally agree with the idea that my colleagues are banging down the door demanding that I get rid of those rules. The Government, and the Cabinet as a whole, are absolutely committed to them. Because we understand the legacy that we have of managing the books carefully for a small, open economy, susceptible to the shocks of the world – both natural and economic. And I will not take my eye off the ball from that at any point. In fact, a critical part of our wellbeing as a nation is ensuring that we continue to operate under careful fiscal management.
We do have net debt tracking down towards 20% of GDP, as we promised. We did produce a Budget which has a strong surplus in it for this year, and growing surpluses. We do have unemployment tracking down towards 4%. Inflation is relatively stable, tracking towards 2% - the middle of the range. We saw excellent GDP growth for the last quarter – the best quarter in two years; 15 of 16 sectors growing well.
So there is good data out there in the real economy.
I’ve just spent a couple of days on the road with Kim Campbell (EMA). What I learned as we went through Whangarei and Rotorua, is that there remains good work being done in the regions. So we do have a situation where the economy is sound.
But of course it’s not without challenges, and I’m acutely aware of the importance of us establishing and strengthening our international ties. We can no longer rely on any one market, and nor should we. We must diversify what we send to the world and where we send it. That’s why we were not only proud to put the CPTPP in place, but also get across the start line with the European Union FTA – an agreement that I think will be very significant for New Zealand over the coming years.
That focus is absolutely critical for us in terms of developing our international connections.
I’m aware from speaking to business people in this room both this morning and on previous days, that there is a growing concern around what is happening in China – tightening of credit, the order books not filling up from there. That’s a message to all of us that we must continue to diversify the markets that we’re exporting to.
In the time remaining I want to focus on where we are heading. And I want to make one comment first about the question of the ‘less hui and more doey’. The first thing is to say that, the reason we’re undertaking the reviews we are is because this Government wants to face up to some really big challenges in our society – be it on mental health, be it on NCEA or the education system, be it on making sure we have a more modern monetary policy or a tax system that’s fit for the middle part of the 21st Century. These are not reviews for reviews’ sake; these are reviews to create the institutions and the policies that will allow our economy to thrive through the middle part of the 21st Century. And we want to work with you on it.
Christopher Luxon is leading the Prime Minister’s Business Advisory Council and we’ll make some announcements very soon about the terms of reference and the membership. You can read about Christopher’s thinking up to this point in the [Mood of the Boardroom] document.
We want to work across the business sector to build on the work we’re doing to create that economy that can face up to the rapid changes of the future of work. We’ve established our Future of Work Forum with business and unions to address the very issues that are in this report. Making sure that technology is adopted, making sure that we have the skills and the training in our workforce for the 21st Century. We’re piloting a project right now with the New Zealand Manufacturers Network on a skills shift to start to retrain a whole workforce in a whole industry – because that’s how we’ll make sure we remain a profitable country and one where people can achieve their potential.
We also do have an economic plan. It (Our Plan) is a document that outlines the direction we’re going in:
A more productive economy, built on research and development, a higher-skilled population, better international connections, and strong investment in infrastructure. We’ve made progress on all of those things in the year that we’ve been in Government.
A more sustainable economy. And I do want to give some credit to James Shaw for the work that he’s been leading in building a political and business consensus around our shift to a lower-carbon economy. This will only work if we’re all together on that.
And a more inclusive economy, where we do invest in the regions and we do give people, wherever they’re from, a chance to participate in our society and achieve their potential.
More productive, more sustainable, more inclusive. That’s the economy that will lift our living standards and will contribute to wellbeing. That is the economy that I’m happy to be leading at the moment.
Closing remarks:
What we’re focussing on is the plan for the foundations for a 21st Century economy. Our first Budget was very much about that – it was about making sure we kept to those Budget Responsibility Rules and made big and significant investments in the areas that the public wanted us to do so – health, education, housing – and reducing child poverty. We’ve done that and will keep working on those issues.
But the future focus is around how do we lift the living standards and wellbeing of New Zealanders? And that means, for me, the four I’s:
Getting the institutions right – that’s why we’re doing the Tax Working Group review, that’s why we’re doing the Reserve Bank changes, that’s why we’re creating the new infrastructure entity that New Zealand needs to get a clearer pipeline and pathway for our building industry and those critical infrastructure assets
The second I is investment: Making sure that we are getting investment going to the right parts of the economy. That’s the Tax Working Group. It’s also the creation of new financing and funding mechanisms like Special Purpose Vehicles.
It’s making sure we lift the role of savings and invest in infrastructure – world-class infrastructure for this city and for the regions of New Zealand.
And it is on innovation: We have to be able to grasp the future of work positively.
We’ve done a lot already from the transport plan, to KiwiBuild, to the child poverty reduction measures. But we acknowledge there’s a lot more to do, and we look forward to working with you over the coming years to make that happen.Wed, 03 Oct 2018 10:36:52 +1300beehive.govt.nz105768Another vote of confidence in the Coalition Government’s economic managementhttp://www.beehive.govt.nz/release/another-vote-confidence-coalition-government%E2%80%99s-economic-management
The Coalition Government is welcoming another sign that our economic plan and decisions to run surpluses and pay down debt are paying off for New Zealand, Finance Minister Grant Robertson says.
International credit rating agency Moody’s last night reaffirmed its Aaa rating with a stable outlook on the New Zealand Government’s financial position – the highest score it is able to give.
“In its latest update on New Zealand, Moody’s says the Government’s fiscal management has created the space needed for investment in areas like infrastructure, affordable housing, education and policies to support families. This is exactly what we planned for at Budget 2018 – while continuing to live within our means by running sustainable surpluses,” Grant Robertson said.
“Moody’s says they expect New Zealand’s growth to be stronger in the next few years than other Aaa-rated countries. They also say our debt reduction track will see government debt fall significantly lower than other Aaa countries.
“As Moody’s notes, this is important because New Zealand is more susceptible to the classic rainy day – natural disasters and changes in the international economy – than some of our peers.
“That’s exactly why we are staying within the Budget Responsibility Rules. These include running sustainable surpluses, getting net debt down to 20% of GDP within five years, and making sure government expenses remain under control and in line with what Governments over the past 20 years managed.
“The update from Moody’s comes on the heels of this week’s GDP figures showing the New Zealand economy had its best performance in two years over the latest quarter. The economy grew by 1% in the three months to June 30, with broad-based, inclusive growth across industries and regions. It’s not just the one quarter that looks good – real GDP growth over the first half of 2018 was in line with the Treasury’s Budget forecast, and business investment is up 5.7% from a year ago.
“The Coalition Government has undertaken to work alongside business as the economy continues its transition to growth that is more productive, sustainable and inclusive, and which doesn’t just rely on property speculation and population growth as its main drivers,” Grant Robertson said.Sat, 22 Sep 2018 11:31:10 +1200beehive.govt.nz105608Feedback sought on Tax Working Group interim reporthttp://www.beehive.govt.nz/release/feedback-sought-tax-working-group-interim-report
The public is encouraged to provide feedback on the interim report released today by the Tax Working Group (TWG), Finance Minister Grant Robertson and Revenue Minister Stuart Nash said on Thursday.
Since it was set up in January, the group has regularly released policy advice and papers it has received in order to keep the public informed.
“The TWG was asked to consider the structure, fairness and balance of the tax system and we expect it to address those questions,” Grant Robertson says.
“The Government has always been clear that no changes will be implemented this term and that there are key bottom lines. In particular the family home, increases to income tax and GST, and an inheritance tax are off limits,” Grant Robertson says.
“The purpose of the TWG is to ensure our tax system is fit for purpose for today’s New Zealanders and for future generations,” Stuart Nash says.
“We look forward to continuing to hear from the TWG as it considers feedback and prepares its final report for Government which is due in February,” Stuart Nash says.
“We have sent a letter [attached] to the Group, asking for more information and work in some areas,” Stuart Nash says.
Submissions are open until 1 November 2018 and more information can be found at https://taxworkinggroup.govt.nz/
Thu, 20 Sep 2018 11:16:36 +1200beehive.govt.nz105570Enhancing New Zealand’s financial management http://www.beehive.govt.nz/release/enhancing-new-zealand%E2%80%99s-financial-management
Measures to modernise the framework New Zealand governments use to manage public finances took a step forward today, Finance Minister Grant Robertson said on Wednesday.
“The Public Finance Act (PFA) is an important part of providing accountability and transparency in how Government’s manage our finances,” Grant Robertson says.
“As part of our plan to deliver a Wellbeing Budget in 2019, we are making an important addition to the Public Finance Act which sets out what Governments must report on,” Grant Robertson says.
The amendments will introduce requirements for
the Government to set out how its wellbeing objectives, along with its fiscal objectives, will guide its Budget decisions; and
the Treasury to report on wellbeing indicators, alongside macroeconomic and fiscal indicators.
These amendments sit alongside already-announced amendments to the State Sector Act to help create a more integrated and effective public sector.
“I encourage people to submit their views on this proposal, and be a part of the wider conversation on how governments can use a wellbeing approach to support strategic decision-making,” Grant Robertson says.
Also released on Wednesday, by Associate Finance Minister James Shaw, is a public consultation on the planned Independent Fiscal Institution.
Establishing the institution, which would monitor the Government’s adherence to its Budget Responsibility Rules and provide political parties with independent, costings on their policies, was signalled as part of Budget 2018.
“The Government is committed to responsible fiscal management. An independent body like this would help strengthen both accountability and public debate over the country’s fiscal performance. It will also support political parties’ development of public policy and provide the public with confidence about the costings of those policies,” says James Shaw.
“We want to hear the public’s views on establishing an Independent Fiscal Institution (IFI) as well as their thoughts on the roles such an independent body could have,” James Shaw said.
“The Government’s taking every step to having a sustainable, productive, and inclusive economy. Responsible management of the government’s books is essential to this, and to improving the inter-generational wellbeing of all New Zealanders,” Grant Robertson says.
More information can be found at the following sites:
https://treasury.govt.nz/public-finance-system/establishing-independent-fiscal-institution
https://treasury.govt.nz/public-finance-system/embedding-wellbeing
Wed, 12 Sep 2018 13:34:17 +1200beehive.govt.nz105440Grant Robertson to visit Canberrahttp://www.beehive.govt.nz/release/grant-robertson-visit-canberra
Minister Grant Robertson will undertake a two day visit to Canberra, beginning tomorrow, covering both finance, and arts and culture topics.
“On behalf of the Minister of Arts, Culture and Heritage I will attend the Meeting of Cultural Ministers, an inter-governmental group fostering cooperation in the arts.”
“I’ll be talking with the Minister for Communications and the Arts, Senator Mitch Fifield, and State and Territories representatives to further our mutual interests in arts and culture,” Grant Robertson said on Wednesday.
“This visit also provides a platform to talk about our work on sustainable careers in the creative sector and the work we have begun to improve access to the arts particularly at community level.
“As Finance Minister, I’ll also be taking the opportunity to meet with my economic counterparts from the Government including Treasurer Josh Frydenberg, and Minister for Finance Senator Mathias Cormann, to further the strong economic relationship between our two countries.
More information on the Meeting of Cultural Ministers can be found at: https://www.arts.gov.au/mcm
Minister Robertson leaves for Canberra on Thursday September 13 and returns to New Zealand on Friday September 14.
Wed, 12 Sep 2018 13:02:47 +1200beehive.govt.nz105438Reserve Bank Review Panel appointmentshttp://www.beehive.govt.nz/release/reserve-bank-review-panel-appointments
Finance Minister Grant Robertson today announced three new appointments to the Independent Expert Advisory Panel ahead of Phase 2 of the Review of the Reserve Bank Act.
Barbara Chapman, Belinda Moffat and John Sproat join existing members Suzanne Snively (chair), Malcolm Edey and Girol Karacaoglu on the Panel.
“The Review of the Reserve Bank Act is a one-in-thirty-year opportunity to ensure New Zealand has a well-functioning and efficient financial system,” Grant Robertson said.
“Phase 1 of the Review considered and recommended changes to New Zealand’s monetary policy framework. These included that the Reserve Bank considers maximum sustainable employment alongside its price stability mandate, which it is now doing.
“Phase 2 will ensure the Reserve Bank Act is fit for purpose and aligned with what the Government considers is a strong, flexible and enduring regulatory framework for the financial system that enjoys broad public and industry support.”
The detailed work of Phase 2 is being led by a joint Reserve Bank and Treasury team. The Review team will shortly release details outlining the Phase 2 process. The previously announced terms of reference for Phase 2 can be found here.
The Panel’s role is to provide independent advice to the Minister of Finance on the work being carried out by that team.
“As the terms of reference for Phase 2 are broader and more wide-ranging than Phase 1, the appointments announced today will enhance the existing Panel by adding a mix of regulator and regulated and capital markets advisory experience,” Grant Robertson said.
Note to editors:
Barbara Chapman is an experienced banker with a 36-year career in the financial sector, culminating as the Managing Director and Chief Executive of ASB. She is now focused on governance roles as a director of Genesis Energy, NZME and Fletcher Building.
Belinda Moffat is a lawyer by training with a career that spans law, banking and regulation. She is currently the Chief Executive of the Broadcasting Standards Authority and was previously the Director of Enforcement and Investigations at the Financial Markets Authority immediately following its establishment.
John Sproat is a commercial lawyer who practised for 23 years as a banking and finance partner at Chapman Tripp, focusing on a wide range of capital markets and financing transactions. More recently he was special counsel for Al Busaidy, Mansoor Jamal and Co in Oman. He has recently been appointed to the Independent Advisory Panel of the Provincial Growth Fund.Fri, 07 Sep 2018 15:50:59 +1200beehive.govt.nz105390Wellbeing's role in government policyhttp://www.beehive.govt.nz/speech/wellbeings-role-government-policy
Kia ora everyone, and welcome back to Parliament for the third day of the Third International Conference on Wellbeing & Public Policy.
It’s my privilege to speak to you as Minister of Statistics and Associate Minister of Finance, and discuss the role of wellbeing in the Government’s policy platform.
I’d like to thank the organisers, Victoria University of Wellington, the Treasury and the International Journal of Wellbeing, for hosting this conference.
I’d also like to acknowledge the academics and other people who have travelled not just from overseas, but from around New Zealand.
I want to thank all of you for being part of this opportunity to progress wellbeing research, and encourage you to engage directly in the different consultations going on at the moment.
I know there is a lot happening across Government right now. Most of it is aimed at wellbeing itself, in some direct or very indirect way or another.
Today I’m going to talk about the opportunity for improving how we measure outcomes for New Zealanders by focusing on wellbeing.
So, bringing it back to all the activity going on across Government right now—which is trying to improve wellbeing in some way—I want to lay down a challenge to researchers and academics interested in using wellbeing research to incorporate it into policy making.
GDP and Wellbeing Ambitions
The Prime Minister’s 100 day plan speech outlined our shared ambition. To quote her directly:
“We want New Zealand to be the first place in the world where our Budget is not presented simply under the umbrella of pure economic measures, and often inadequate ones at that, but one that demonstrates the overall wellbeing of our country and its people”.
We have also said that we will provide new leadership for how New Zealand is governed.
Our vision is therefore to be a compassionate Government that measures itself by how well it improves the wellbeing of people—all people.
One of my Ministerial responsibilities includes the development of sustainable development indicators.
I think it is worth noting that this work sits in my Finance portfolio delegation, rather than Statistics.
It reflects that my particular interest is to add to GDP and all the fiscal indicators that capture costs in policy making.
While the fiscals will remain an important marker of economic activity, used in isolation they miss important elements of why we work for better outcomes: to improve wellbeing.
GDP, and more importantly, the economic indicators that make it up, tells us a lot about what moves, or what enters the ‘measured sectors’ that were previously unmeasured (or untaxed).
But GDP isn’t a proxy for wellbeing, nor for ‘utility’ or capability.
GDP is repeatedly criticized for being a poor indicator of social welfare and for leading governments astray in their assessment of economic policies.
GDP statistics measure current economic activity in terms of through-put.
But they ignore wealth variation, international income flows, household production of services, destruction of the natural environment, and many other determinants of wellbeing.
They don’t take account of the quality of social relationships, economic security and personal safety, health, and longevity.
The past two decades have witnessed an explosion in the number of alternative indicators and a surge of initiatives from important institutions such as the OECD, the United Nations Development Programme and the EU.
In addition, research work such as the Planetary Boundaries, has brought the importance of environmental sustainability and ecological limits to the forefront of economic discussions.
Living Standards Framework
Being one of the Finance Ministers under this Government has exposed me to Treasury advice.
The Treasury, lead economic advisor to the Government, is developing a Living Standards Framework that puts current wellbeing and the four capitals (human, social, financial, and natural capital) at the heart of their operations.
A key focus of the Living Standards Framework is the sustainability of the four capitals.
Treasury considers the Living Standards Framework can help improve the delivery of its core functions of providing economic and fiscal advice.
As Treasury embeds the Living Standards Framework into its functions, it is expected that future wellbeing and the sustainability of the four capitals will be the cornerstone of all its advice.
It has released a series of papers for consultation proposing a Wellbeing Dashboard and exploring the use of a capital stock economic framework through their Living Standards Framework.
These are incredibly well-researched pieces of work and I encourage you to explore them.
I, for one, am interested in whether Treasury thinks we can trade off those capitals. Can we compensate reductions in natural capital with increases in financial capital?
Johan Rockstrom’s work on Planetary Boundaries, and Kate Rowarth’s book on ‘Donut Economics’, are pretty clear that while at the margin this is possible, there are limits.
I think it is crucial that we are aware of those limits when trying to think about wellbeing, because future wellbeing depends on the sustainability of the capitals. If substitutability between capitals becomes limited, we need to know in advance.
The Treasury’s aim is to organise indicators of overall progress against international benchmarks, and to identify areas where NZ is relatively weak and might want to prioritise action.
Later this year, the Treasury will publish a Living Standards Dashboard for the first time.
It will indicate:
The current wellbeing of New Zealanders
The distribution of wellbeing across the population, and
The direction of future wellbeing through indicators around the “four capitals”.
The Dashboard should capture this information—borrowing from integrated reporting and balanced scorecard approaches in business—and indicate where we might have problems, providing a ‘warning light’ about things we need to start paying more attention to.
This should support better policy advice that employs a common language around outcomes across a number of policy domains and affected population groups.
The emphasis will continue to be on demonstrating that initiatives will deliver particular objectives in a cost-effective way.
However, we want those initiatives to be anchored in an overarching wellbeing approach so that we know our priorities are right.
I think this is a better approach than only exploring costs, and only committing to the short term. I also think that a capabilities approach to outcomes is a useful addition to understanding what impact we are aiming for.
The Government wants to know what different approaches might mean over the medium and long term.
We need to a take a longer-term view to make a difference. This is the essence of sustainability. It is the recognition that citizens’ wellbeing has both distributional and generational drivers, which share overlapping responsibilities to each other.
This wider context underpinning individual initiatives will enable us to take the more comprehensive approach the Government is seeking.
The Treasury considers the Living Standards Framework – and I quote –
…is the means to draw together the measurement of the variety of outcomes from government expenditure so they are consistent across the whole range of economic, social and environmental policies, and consistent with the intentions of expenditure.
Now if you can discern the meaning of that you probably work for the Treasury.
But for some of the Treasury’s critics, it can be even harder to understand.
Some of those critics argue that Treasury should stick to its knitting and just monitor the fiscals.
What is clear, is that there are questions about how to define and measure intangible forms of capital—particularly if we are going to use this information to guide choices.
How would you quantify these benefits?
How would you quantify something that has no monetary value associated with it, e.g. aesthetic value of trees?
How does current preference relate to future preference?
How do you mathematically express future wellbeing?
All of these are valid questions and highlight the difficulty in quantifying ecosystems and their services.
However, I maintain that to fully understand the contribution of natural capital to future wellbeing, work should be progressed to quantify that where possible.
My first day at my first job at Price Waterhouse many years ago, the first thing I learnt was what gets measured gets managed.
This is glib, but I want to be clear: wellbeing analysis does not replace rigour. It does not replace cost-benefit analysis. If anything, it requires more rigorous cost-benefit analysis.
To date, most of the NZ environmental reporting has focused on the stock and state of natural resources.
Limited information is currently available on ecosystem services.
As work on identifying measures and collecting data regarding the ecosystem services continues, it will provide more depth and breadth.
The availability of more granular and regionally distributed ecosystem services data, will also enable the identification of risks and opportunities.
Another gap that has been identified as part of the development of the Living Standards Dashboard, is cultural services (e.g. ethical, inspirational and educational) that the various ecosystem assets provide.
Not only is it a data issue, but more research is required to determine the appropriate measures for cultural services in NZ.
We must acknowledge the importance of Te Ao Maori (the Maori world view) to who we are as a country.
Indicators Aotearoa NZ (or Ngā Tūtohu Aotearoa)
The fact the Prime Minister gave me the privilege to hold responsibility for the Statistics portfolio reflects that I don’t want to throw the measurement baby out with the GDP bathwater.
Treasury is working with StatsNZ to build a broad measurement framework to measure wellbeing, called Indicators Aotearoa New Zealand, or Ngā Tūtohu Aotearoa.
Some of you may ask what the relationship is between the Treasury’s Living Standards Framework and Stats NZ’s Indicators Aoteara.
The way that I think of it is Indicators Aotearoa is data and the Living Standards framework is information.
Stats NZ provides a pool of data from which Treasury and others make their analysis and interpretations and turn it into information.
Their approach, which you will hear more about later today, builds on the Conference of European Statisticians Recommendations on Measuring Sustainable Development.
This means shining a light on how New Zealand is tracking in a way that moves beyond narrow economic measures, and provides an independent picture of progress through a wellbeing and sustainable development lens.
Importantly for wellbeing, I want the Government to be able to show New Zealanders how different population groups are faring.
My intention is for StatsNZ to develop its systems and collection methods to provide an independent, authoritative, and – importantly - a comprehensive set of environmental, social, and economic sustainability indicators.
We are also looking at StatsNZ’s mandate to move beyond collecting and publishing statistics, to being a data steward for the whole public sector.
This would involve setting standards for how data is held and used and supporting agencies in how they use information to advise the Government.
But most important, at this stage, is ensuring we establish the systems to capture information about what New Zealanders value. The indicators will therefore be selected through an inclusive process.
We’re asking New Zealanders to tell Stats NZ what indicators they’d like tracked as part of Indicators Aotearoa.
Stats NZ is running public consultation on ‘what matters’; presenting to representatives from community organisations, business groups, local government and social service providers – speaking in their places of work, community meetings, and in events such as this one today.
Following the end of public consultation, Stats NZ will be running a series of data workshops with subject matter experts to identify possible indicators which could tell the wellbeing story of New Zealand.
The workshops will culminate in a technical data event in December that brings together the findings of the public consultation and the data workshops.
The aim of the event is to agree a suite of approximately 100 economic, social, cultural and environmental indicators.
So please encourage your friends, whanau, colleagues and organisations to have their say by visiting stats.govt.nz.
We would like as much input as possible during the rest of the consultation phase - which runs to September the 30th.
How IANZ will be used
So far, we have had lots of feedback.
Officials are working across government to ensure the different pieces of the Government’s Wellbeing work are joined up.
Most immediately, the Indicators Aotearoa work will be used by the Treasury to produce its Wellbeing Dashboard.
It will inform our international reporting commitments: like Voluntary National Reporting of the Sustainable Development Goals in July next year, and Human Rights Reporting.
It will support sector and domain reporting (like the Ministry for Social Development’s Social Report);
Importantly, together with proposed changes to the Public Finance Act, it will enable public and policy researchers to hold the government to account.
The indicators should be driven, in part, by principles of what is best for accountability and state sector performance and efficiency.
Understanding the state and direction of change of higher level wellbeing outcomes (the macro) is something that will need to emerge over time.
Audiences like this one need to engage with the data, information, analysis, and advice that the Government makes available.
The degree of control by the state sector on immediate outcome indicators is not always obvious, as most outcomes are complex and only observed over the long-term.
Wellbeing research will be most effective if it is used to inform various policy frameworks—not just flagship products like the Child Wellbeing Strategy (being led by DPMC).
Therefore it is crucial to improve the research, monitoring, evaluation, and review functions of policy and regulatory agencies.
This includes how agencies design their performance reporting and monitoring frameworks to focus on improving wellbeing.
It also includes how agencies report on the performance of policies and services and outcomes for population sub-groups.
The Living Standards Framework won’t replace agency advice, or dictate how they frame-up problems.
Agencies will be able to contribute to that high-level Treasury macro analysis with specific data and more nuanced analysis.
But it will be just as important for agencies to specify the particular dynamics contributing to performance, and then identify and implement interventions to address them.
Embedding wellbeing thinking: Reviewing the architecture
In June, Cabinet endorsed the Stats NZ and Treasury projects as well as the development of state sector reforms to support current and future wellbeing.
I believe that New Zealand has an incredible opportunity to be one of the first countries in the world to transition to a truly sustainable economy and to show the rest of the world how it’s done.
This Government wants to make this focus on wellbeing enduring. To do that, we plan to amend the Public Finance Act to require reporting on wellbeing.
This proposal is part of a wider package of reforms to the State Sector, which include changes to the Public Finance Act and to the State Sector Act.
Together, those changes will reinforce our commitment to putting wellbeing at the heart of our policies, and better enabling public sector work that improves the intergenerational wellbeing of New Zealanders.
This week the Honourable Chris Hipkins announced consultation on changes to update the State Sector Act, the most significant public sector reform in New Zealand in thirty years.
Our aim is a public sector that operates as one joined-up system capable of tackling the complex challenges of our time.
And, as Grant Robertson outlined on Wednesday, we are going to consult on Public Finance Act changes, to ensure that our Budget process also embeds wellbeing.
He will shortly be releasing a discussion document about how we do this.
We both agree that the public service and governments alike should have responsibility for reporting on wellbeing as part of our core financial processes.
The Challenge: Using Wellbeing analysis in policy
All this work is partly about using more data and evidence to inform policy. Monitoring and reporting (and Budget-level prioritisation of resources) needs to be complemented with a wide ranging shift in the way that agencies operate in order to focus on wellbeing.
Combining a broader set of indicators and generating advice about trade-offs are big challenges. This is why the Treasury has engaged widely on the Living Standard Framework with academics.
However, the harder part is making more and better information useful to the political process and the constitutional context in which officials’ advice operates.
In other words, my read is that academics have thought deeply about the conceptual issues of wellbeing, but less so about how to apply these issues to guide policy.
My view is that being serious about wellbeing requires a commitment to evaluation, and using evidence not just in new policy ideas, but old zombie ideas.
Testing, such as through Randomised Control Trials (RCTs), and committing to use evaluation to inform ongoing political mandates, is required for this to work.
The problem is, of course, it is a brave Minister who commits to a process that might expose their great policy idea as having failed.
But we need to face up to this risk, if we’re going to improve the quality and services government delivers.
As I have said, this requires a closer look at some Government objectives that are currently described qualitatively.
It requires enabling better collaboration to address complex issues.
The consultation on State Sector Reform is an opportunity to arrange the massive ship of state in a way that enables better collaboration.
But we also need to be clear about accountabilities and what fulfilling them looks like.
Section 32 of the State Sector Act currently requires agency Chief Executives to take a stewardship approach to the legislation they are responsible for.
Just as the budget process focuses too narrowly on new marginal spending and simply rolls over the bulk of existing spending without even raising an eyebrow, our policy agencies take a ‘set-and-forget’ approach, without incorporating evaluation, research, monitoring, and - importantly - reviewing of their stewardship responsibilities.
So, my challenge is to revisit policy decisions, demand good analysis by agencies, and engage in the evaluation process.
Wrap up
As Grant Robertson said on Wednesday, we want to be a country that is prosperous, but cares about who shares in that prosperity, how we look after our land and our water, how we make our people healthier, more secure, more skilled and more reflective, and where we connect our communities.
Thank you again for being here, especially those who have travelled. I wish you the very best for a fruitful third day of the conference.
Fri, 07 Sep 2018 10:20:18 +1200beehive.govt.nz105362Speech to the opening of the Third International Conference on Well-being and Public Policyhttp://www.beehive.govt.nz/speech/speech-opening-third-international-conference-well-being-and-public-policy
Kia ora and welcome to the Parliament of New Zealand, Te Whare Paremata. It is my great pleasure to be here today to open the Third International Conference on Well-Being and Public Policy. We are honoured to have you here in Wellington to discuss this essential topic.
For me this is a momentous day for another reason. It is my mother’s birthday. She will be horrendously embarrassed that I mentioned that, but not only does it save on sending flowers, it is an acute reminder for me of what is important in life.
I was raised in a tightknit Presbyterian family in Dunedin in the South Island of New Zealand. My parents raised my two brothers and me with some simple philosophies - to treat others as you wish to be treated, that we are our brothers’ and sisters’ keepers, and that if you work hard you will achieve your goals. I was taught what was important in life was more than material things, it was about what we could do for ourselves and our community to make the world a better place.
It is that philosophy I have tried to take with me through my political life as well, and in particular into my role as Minister of Finance. Of course it is my job to ensure that the country’s finances are managed well, but that is not the end of the story. The economy is not an end in itself, it is the means to the end of allowing our people to live good and fulfilling lives.
And so it is from this position that a focus on wellbeing for me and for our Coalition Government is an obvious direction. We have long held the view that GDP is an inadequate measure not only of the quality of our economic growth, but of the value of the other things that affect how we live our lives. In a room such as this I am loathe to start a debate about the definition of wellbeing. I am attracted, however, to ideas of Amaratya Sen of giving people the capabilities to live lives of purpose and meaning for them. Equally it is clear that wellbeing is a long-term proposition - in particular an intergenerational one.
This was made more than clear here in New Zealand at the election last year. The topics that I was questioned about the most in the campaign, be it in the boardroom or the smoko room, were child poverty, the quality of our rivers and lakes, the state of our public services and institutions. New Zealanders were rightly concerned that, despite enviable GDP growth, we found ourselves being reported as having the worst homelessness in the OECD.
There is a saying that what we measure is what we do. If we want the focus to shift to a wider definition of success for our country then we have to change what we measure, not to mention when and how we measure it.
But our ambition goes beyond that. We want the focus on wellbeing to also be what drives the decisions we make about policies and Budget priorities. In 2019 it is my aim to deliver New Zealand’s first Wellbeing Budget. This implies and requires a rigorous framework to understand wellbeing and to be able to report, measure and compare the tangible and the intangible. It is no easy task, and it will evolve over time, but it is our goal, and indeed as the Prime Minister has said, it defines our purpose as a Government. She will speak later in the month about the overall priorities of the Government within this framework.
For me there is also a reason beyond the intrinsic importance of understanding all the elements of wellbeing in defining our economic approach. This is an idea whose time has come, and an approach that is essential to addressing the big issues of this generation and the next.
A narrow approach to value and purpose will not allow us to meet the challenges and accept the opportunities of a rapidly changing world of work where technology, automation and globalisation are changing everything about our working lives.
We cannot hope to make the best choices for future generations about mitigating climate change or ensuring a just transition to a low carbon world if we do not look at environmental, social and economic implications together.
The complex, messy problems that create poverty and inequality require us to look beyond basic economic issues, as essential as they are to solving them, to the wellbeing of our wider communities, the impacts of cultural alienation and our understanding of what makes for security and hope.
The Future of Work, Climate Change and Inequality are to me the defining economic and social issues that this Government must face up to, and they all require a wellbeing approach to deal with them. Indeed, strengthening human, social and natural capital is essential to building a foundation of sustainable growth in the face of these issues.
If we look just at the Future of Work, this is clear. In May this year Andrew Haldane, Chief Economist at the Bank of England, gave a speech where he tracked the phases of the economy over the centuries and noted that it has been the emergence of institutions that saw rises in human and social capital that were an essential pre-condition for economic growth. He speaks of “enabling institutions”, like free and readily available primary and secondary education and in later centuries free tertiary education, that have equipped workers with skills to face changing working environments. He also speaks of “insuring institutions” such as the welfare state, trade unions, and central banks, which provided the cushion of certainty and support through buffeting periods of change.
Haldane has argued that as we face the fourth industrial revolution we need to build our stocks of human and social capital through these types of institutions in order to grasp opportunities and ensure a just and fair transition.
This Government recognises this. In Opposition I established a Future of Work Commission to develop policy responses to support workers and businesses to face the rapidly changing world of work with confidence and resilience. In government we are implementing many of these policies. This includes introducing free post-secondary school education and training, and investment in active labour market policies including re-training programmes and subsidised apprenticeships.
We are continuing the work of the Commission with a tripartite Future of Work Forum bringing government, business and unions together to develop further policy responses to support business to increase technological uptake, improve workplace productivity, further skills and training and make a just transition to a low carbon economy.
We have also launched a re-shaping of other institutions such as the Reserve Bank and of our tax system to ensure we meet wider economic goals. This has meant expanding the objectives of the Reserve Bank beyond price stability to include employment outcomes. We want our tax system to be re-balanced towards the productive sector, and to be ready to support positive environmental outcomes. We are also refreshing our welfare system on the basis of expert advice to be fit for purpose for the changing dynamics of the 21st century.
These policies and institutions are aimed at building social and human capital and are part of creating the pre-conditions for a strong and sustainable economy.
Building natural capital is part of the foundation. This is clear in addressing climate change, where this Government has set ambitious goals to be a net zero emissions economy by 2050. Essential to this is the work of an Independent Climate Commission to undertake carbon budgeting and help develop clear pathways to emissions reductions. Alongside this the Government has established a Just Transitions Unit to support communities and industries through the necessary changes as we work towards this goal. We have new financing mechanisms to take up the opportunities for new technology through our Green Investment Fund and our $1 billion annual Provincial Growth Fund – all about building natural, social, human and financial capital.
In addressing inequality and child poverty our first action as a government was to cancel across the board tax cuts and refocus that to a package of support for low and middle income families and children. We have taken the first steps in re-defining our measures of success. Our Prime Minister has a piece of legislation before Parliament that will oblige the government to set targets to reduce child poverty, and measurements across a range of indicators. What is more, the Bill alters the Public Finance Act to ensure that the Minister of Finance reports on the progress in the context of the Budget.
This is the first step in a much deeper reform to how we undertake our public policy and Budgets to ensure they are truly based on wellbeing.
I am fortunate in this process for the work that has been underway for some time in the New Zealand Treasury, in particular on the Living Standards Framework. In turn that work has drawn on the OECD Better Life Initiative and experiences overseas, and I am grateful to a number of people in the room today for that.
For those not familiar with the Treasury’s Living Standards Framework it is a tool to put sustainable intergenerational wellbeing at the centre of its different functions including policy advice, government expenditure and long term management of our asset stocks. It uses the four capital stocks - natural, social, human and financial/physical - to organise indicators of wellbeing. It has been evolving for some time, and work is now well advanced on the development of a Living Standards Dashboard that will specifically describe the current wellbeing of New Zealanders across twelve domains, the distribution of wellbeing across the population, including on a gender and ethnic basis, and future wellbeing through indicators of the four capitals. This dashboard will be reported on annually and will of course evolve over time.
In tandem with this work, the Treasury and Statistics New Zealand are developing an ambitious project called Indicators Aotearoa New Zealand. Born of the Confidence and Supply Agreement between the Labour and Green Parties it will create a comprehensive set of indicators across the dimensions of the current wellbeing of New Zealanders, future wellbeing based on the four capitals and the impact New Zealand is having on the world.
The officials working on this project have used the concept of a pantry from which appropriate indicators can be drawn. The Living Standards Dashboard is expected to largely be drawn from Indicators Aotearoa New Zealand. It will also inform other government strategies including the Child Wellbeing strategy, and support international reporting such as that on the UN Sustainable Development Goals. It is clear that there are information gaps and there will be proxy indicators or, indeed in some cases, no indicators at all while better data is identified or created.
The framework and our wellbeing approach must continue evolve. There are significant challenges to it, many of which you will hear about in the conference today. The biggest among those for me is making sure that the approach genuinely reflects Aotearoa New Zealand and our values.
The work of the OECD has been extraordinarily helpful, but we must acknowledge the importance of Te Ao Maori (Maori world view) to who we are as a country. A common criticism of the framework is that it does not encapsulate a world view that is more collectivist, and where concepts of value are not so easily separated into clearly defined capitals or disaggregated wellbeing domains.
Treasury and Te Puni Kokiri have been working on this, and some interesting ideas are emerging that actually help to draw together the notion of wellbeing. One example draws on a tikanga Maori concepts such as mannaakitanga (care/respect), kaitiakitanga (guardianship or stewardship) and whanaungatanga (connectedness and relationships) to draw together into waiora or wellbeing.
Similar issues arise in working with the Pasifika community. There is a desire to see family resilience, cultural recognition and Pacific connectedness and belonging recognised more clearly within the framework.
It is vital that this work continues to ensure the framework fairly reflects who we are as a nation and who we want to be as a country, and I know Treasury is committed to this work.
And it is similarly essential that we allow the framework to be open to further challenge and development. Many of the sessions at this conference will challenge the assumptions in the framework and I am grateful for that.
Issues I am keen to see explored more include:
how do we adequately manage weighting the relative merits of each capital? How do we develop traditional cost benefit analysis tools to truly reflect wellbeing?
conceptual challenges to the framework including the underlying assumptions of grounding it in traditional economic concepts. The word “capital” itself is so value-laden that even used in its literal form (an accumulation of value) it causes concerns. But it is important that the framework is rigorous and grounded.
underlying assumptions within the measurement of capitals - for example the continued use of the System of National Accounts and its undervaluing of so-called ‘unpaid work’. Can the framework truly provide an adequate gender analysis in this respect?
Perhaps unusually for a politician I am not at all afraid to debate these challenges. We need to, in order to ensure that the framework is truly useful and enduring.
In terms of the practical application of this approach to our Budget in New Zealand there is an important distinction to make. The Wellbeing Budget is the Budget of this Coalition Government. The Living Standards Framework is designed to endure beyond any particular government and be a long-term approach to highlighting the importance of intergenerational wellbeing. Individual governments will ultimately make their own choices as to what they prioritise and choose to highlight. For us, the Living Standards Framework will be a core input, but it is not the only input, nor is it a strait jacket on our decision making.
For the creation of the Wellbeing Budget we are drawing on the Living Standards Framework, expert advice on evidence-based policy from our Science Advisors and other indicators of wellbeing. It is our desire that from the beginning of the process of setting Budget priorities, through making decisions about specific initiatives, and then measuring and reporting on success, the Budget will use a wellbeing lens. This will see the Budget look different in form and in substance. I will have more to say about the detail of this in December when I release the Budget Policy Statement, but I can say that we are well advanced in our planning for this.
I am often asked for a practical example of how a wellbeing approach would affect Budget prioritisation or policy making. One of the most difficult issues our Government faced on coming into office was to do with the decrepit Waikeria Prison. We were presented with a number of options, and I was advised that the best option was to replace the prison with a 2,500 bed mega prison because the per-bed cost was the cheapest option.
What a wellbeing approach tells us is that a better option is a smaller prison, with a specialist mental health unit attached, and more resources for transitional housing for released prisoners and more funding for addiction services. The per-bed cost will be higher but the long-term benefits, fiscally and socially, will be far more significant. That is the approach that we took - and it is what I believe a wellbeing lens will do for us across our policy framework.
Already in our work on establishing Budget priorities we are seeing the power of a wellbeing approach to breaking down the silos of government and supporting a focus on outcomes ahead of both inputs and outputs. I will have more to say about that in December as well.
In order to achieve lasting impact of a wellbeing approach, we need to ensure that the framework in which the public sector operates reflects this approach.
This can only endure if we get the legislative framework right. Just yesterday, my colleague the Hon Chris Hipkins launched a consultation on the most significant public sector reform in New Zealand in thirty years. Our Government’s aim is a public sector that operates as one joined-up system capable of tackling the complex challenges of our time. We want it to be centred around the needs of citizens, delivering convenient and connected public services. We want it to be marked by joint ventures, one stop shops and high levels of integrity and innovation.
It is also our intention to amend the Public Finance Act to ensure that our Budget process also embeds wellbeing. I will shortly be releasing a companion discussion document about how we do this, but it is my clear expectation that the public service and governments alike will have responsibility for reporting on wellbeing as part of our core financial processes.
It is only with a public sector of this type that we will be able to deliver wellbeing outcomes.
As you can see the wellbeing agenda of this Government is significant and it will take some time to get right. But we will get it right, and we will change the way we work.
In politics we tend to get caught up in, at best, three-year cycles or, at worst, 24-hour media cycles. We must break out of that. The programmes and policies we enact matter and we hope will transform the lives of our people. I believe that this work on wellbeing is likely to be the most significant legacy this Government can leave for future generations. Because, if we can change the way we think about success, if we find our north star in the wellbeing of all our people, now and in future generations, and if we value all that people are capable of, then we will be a better place.
We will be a country that is prosperous, but cares about who shares in that prosperity, how we look after our land and our water, how we make our people healthier, more secure, more skilled and more reflective, and where we connect our communities.
If we get this right, we will have done as Andrew Haldane has said - created the institutions and laid the foundations for our economic success in those attributes of resilience and care, and we will have done as my mother taught me to look out for others as we would want them to do us. That would be a legacy of wellbeing, and of that I would be immensely proud.
Thank you again for being here, and I wish you the very best for a fruitful conference.Wed, 05 Sep 2018 14:02:46 +1200beehive.govt.nz105338Foreign buyers ban passes third reading http://www.beehive.govt.nz/release/foreign-buyers-ban-passes-third-reading
The Bill to put in place the Government’s policy of banning overseas buyers of existing homes has passed its third and final reading in the House.
“This is a significant milestone and demonstrates this Government’s commitment to making the dream of home ownership a reality for more New Zealanders,” Associate Finance Minister David Parker said.
“This Government believes that New Zealanders should not be outbid by wealthier foreign buyers. Whether it’s a beautiful lakeside or oceanfront estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand not on the international market,” Associate Finance Minister David Parker said.
“The National Party opposed this change at every turn, while arguing the wealthiest buyers from overseas who don’t live here and don’t pay tax here should be exempt. That is not a view shared by the overwhelming majority of New Zealanders.
“The Opposition also told New Zealanders they had to choose between trade deals like CPTPP and control over ownership of our land and homes. We have proved them wrong again.
“We needed to pass this law before the CPTPP takes effect, to preserve the right of future governments to loosen or tighten the rules. But they will have to do it openly, through Parliament.”
This critical reform will work alongside the Government’s extensive programme to remedy New Zealand’s housing shortage and address the declining rate of home ownership.
That programme includes KiwiBuild, more social housing and the Urban Growth Agenda.
“This law will support investment in new homes, particularly apartments and homes available to purchase under innovative new models, which will help more New Zealanders achieve the Kiwi dream of home ownership,” David Parker said
The Bill also supports business investment. It includes a streamlined approval process for the purchase of residential land for commercial purposes, whether they be supermarkets, hotels, or family-run dairies.
The Bill also encourages foreign direct investment in forestry, where it is crucially needed, and puts in place a light-handed and more consistent screening test for forestry rights alongside that for freehold and leasehold forests.
Some provisions critical to the operation of the new regime will start immediately following Royal assent, with the new screening requirements commencing within two months of Royal assent.
Wed, 15 Aug 2018 18:00:00 +1200beehive.govt.nz105048New KiwiRail Chair appointedhttp://www.beehive.govt.nz/release/new-kiwirail-chair-appointed
Greg Miller has been appointed to chair the KiwiRail board, Minister for State Owned Enterprises Winston Peters and Minister of Finance Grant Robertson announced today.
Mr Miller replaces Trevor Janes, who resigned effective 30 June 2018. Acting Chair Brian Corban will continue in the role until Mr Miller takes up his position on the board. Mr Corban will resume the Deputy Chair role when Mr Miller joins the board.
Mr Miller is currently the Managing Director/Chief Executive of Toll New Zealand, a position he has held since 2008. He began his career as a cadet in transport operations at Mainfreight Group, rising through the ranks to become a key Group Senior Executive. He has since held roles at Tranz Rail and Tranz Link International as Managing Director across New Zealand, Australia and Asia and was Toll Tranzlink Director and Group General Manager from 2003-2008, where he chaired the Toll Tranzlink NZ Fonterra Strategy Committee.
“The Coalition Government has made rail a priority in our plan to boost the productivity of our regions after years of central government neglect for this crucial part of our economic apparatus,” Winston Peters said.
“Greg Miller’s leadership in the transport industry in New Zealand, in rail, road and sea transport, gives him a strong base for chairing KiwiRail and to help it meet the high expectations that the Coalition Government has for rail in New Zealand,” Winston Peters said.
“The 2018 Government Policy Statement on Land Transport highlighted how critical rail is for improving transport connections to the rest of the world for our exporters. KiwiRail is an important partner in this, and we look forward as shareholding Ministers to engaging with Mr Miller as we roll out our plans,” Grant Robertson said.
The appointment means Mr Miller will also join and chair the New Zealand Railways Corporation NZRC board.
“I look forward to working with the KiwiRail team, from the railway workers at the coal face to the new chief executive of KiwiRail, to keep building this company and delivering a rail operation that performs for our customers in all cities and regions, with a competitive commercial strategy,” Greg Miller said.
“I’m particularly keen to prioritise KiwiRail’s high-performance, high-engagement model where workers and executives collaborate to harness opportunities and improve productivity for the benefit of the whole company,” Greg Miller said.
Mr Miller has been appointed for a term of three years.
Wed, 08 Aug 2018 16:00:50 +1200beehive.govt.nz104966Keynote address to the KangaNews New Zealand Debt Capital Markets Summit 2018http://www.beehive.govt.nz/speech/keynote-address-kanganews-new-zealand-debt-capital-markets-summit-2018
Thank you very much for having me here today.
I want to begin by setting the scene and giving a bit of context to the situation in which the New Zealand economy is operating right now.
Given that we’re at Sky City, it feels fitting to start by referencing the recent comments by Sky City Chair Rob Campbell, who said that New Zealand “is a great place to open and operate a business.”
As you all know we are country with strong institutions, legislation and regulation to ensure fairness and ease of doing business. Our banking system is sound, we continue to sit near or at the top of Transparency International ratings for the absence of corruption.
The fundamentals of the New Zealand economy are strong. We are in surplus – projected to be $3.1 billion this year, rising to $7.3 billion by 2021/22. Net core Crown debt is low compared to international trends, and our Government is committed to reducing that to 20% of GDP over the next five years. Over the forecast period we are set to see GDP growth average around 3%.
In terms of current indicators there are also good signs:
Our terms of trade are near a record high
Our stock market is up around its record high
Building consents in the June quarter were up 7.5%, pointing to robust residential investment in new housing
Business investment was up 5.5% in the latest GDP data.
This has led to solid employment growth, with 94,000 more people employed in the year to the end of June. Unemployment sits at 4.5%, with projections of it heading towards 4% over the next few years.
Last week’s employment statistics also showed the highest employment rates ever for Maori and women, and we’ve seen a fall in the number of young people not in employment, education or training.
Last week’s ANZ Job Ads series was up 4.7% in July from a year ago.
And we are seeing wages start to rise as working Kiwis share more in the benefits of economic growth.
That is where we are now.
That is not to say that everything is perfect or there are not challenges and risks that we must face up to.
In the last few months I’ve had conversations with business leaders up and down the country. I’ve consistently heard similar messages: that businesses are optimistic about their own prospects, but that they do have some concerns. They face problems finding workers with the right skills. They are also concerned about growing trade protectionism and geopolitical tensions abroad. And yes, there are aspects of the Government’s agenda that they disagree with.
In KPMG’s 2018 New Zealand CEO Outlook Survey, released this week, CEOs are optimistic about the economic environment in New Zealand, but their number one concern is geopolitical volatility.
That concern about the international picture is something I share and which the Government will continue to monitor. It is important not to overdramatise the situation. Global growth is projected to be 3.9% this year. But there are issues well beyond New Zealand’s control that we need to be mindful of. Tit-for-tat tariff restrictions, some slowdown in the Chinese economy and various international tensions are risks that, if they develop further, will affect New Zealand.
Overall, the markets for New Zealand exports continue to grow. The Government is committed to expanding them and we were very pleased to recently get a free trade deal with the European Union across the start line. The Trade for All agenda launched by the Prime Minister this week is an important ingredient in ensuring that we continue to develop high-quality trade agreements that support our exporters in their quest for higher value and greater returns.
There is every reason to be optimistic about New Zealand’s future economic prospects, and this Government is committed to working alongside the business community to develop them.
In that KPMG report, CEO Godfrey Boyce said that the recent tempering of confidence – a “realistic re-balancing” as he called it – presented an opportunity for business to refocus their collective attention on what was needed for future growth.
The survey highlights that CEOs are grappling with the challenges of digital transformation. It shows that they are conscious of the need to foster innovation and build agility in the face of changing technologies and global trends.
And there was an interesting comment that businesses were looking to link their growth strategies to wider societal purpose.
To me, the issues raised in the report represent an opportunity. An opportunity for us to transition the New Zealand economy off a growth path dominated by population increase and housing speculation, to one that is more productive, sustainable and inclusive.
In recent years, a huge increase in demand for housing, driven by speculation, without a corresponding increase in supply, may have given us some attractive headline GDP growth numbers that we were able to boast about.
But it also gave us the housing crisis.
When you see New Zealand’s home-ownership rate drop to its lowest point in over 60 years, or our homelessness rate reported as the highest in the OECD, you realise that not all New Zealanders benefited from that growth in GDP.
It could be argued that this strong headline growth – driven by migration and the housing market – masked the need for us to become more productive, or create more agile business models and position ourselves for the technological change which the CEOs in the KPMG survey have noted as the challenges they face.
So, in short, the heart of our Government’s economic plan is to help New Zealand become a more productive, more sustainable, and more inclusive economy in which all New Zealanders can thrive.
To be more productive we need to work smarter and produce more with what we have.
When I say more sustainable, I mean meeting the needs of the present without compromising our ability to do so in the future.
When I say more inclusive I mean ensuring that nobody misses out on the benefits of economic growth.
These are the issues that the business community has asked us to work with them on, and it is that partnership I am focused on developing.
Under our plan we will ensure New Zealand’s economy is adaptable and resilient to the opportunities and challenges posed by a rapidly changing world.
Our focus on improving productivity is centred on several core policy initiatives.
The first is developing our infrastructure. This Government is set to invest $10 billion more in capital over the next five years than the previous Government had planned. The Government Policy Statement (GPS) on Land Transport earmarks $4 billion of investment next year in our nationwide road and rail networks – up 11% from the previous Government and rising to $4.7 billion in ten years’ time.
Through the GPS, we have specifically directed the New Zealand Transport Agency to direct investment to projects that will lift regional productivity and help exporters get their produce to the world more efficiently.
Here in Auckland, the Government and Auckland Council have agreed a $28 billion transport package that will transform the transport networks of this city.
We have an ambitious urban growth agenda to create sustainable urban communities across New Zealand.
We are looking to encourage private investors to participate in building the long-term infrastructure that New Zealand needs. This includes using innovative funding and financing mechanisms such as the use of Special Purpose Vehicles for funding specific infrastructure projects. We also want to create an environment for greater use of KiwiSaver funds in New Zealand, in particular as part of well-packaged infrastructure projects.
We also know that we need to provide a more coherent, transparent and efficient system for implementing our infrastructure plans. You’ll hear more from Ministers in the next few weeks about our plans to provide more certainty and clarity around the long-term pipeline of work and an easier way of working with government on infrastructure. I will add to this that I have also asked Treasury to report on whether we can move to more certainty on capital funding across Budgets.
Being able to signal forward several years not only the pipeline of work, but also the scale of government investment, will help the construction industry plan ahead, including in terms of which skill sets they will require.
Another critical element of improving our productivity is to ensure that we have the investment signals directed towards the productive side of the economy, and away from those unsustainable drivers like housing speculation. In September, the Tax Working Group, under the leadership of former Finance Minister Sir Michael Cullen, will report on its initial recommendations for a better-balanced tax system that is fit for the middle part of the 21st Century. This represents an important step in modernising our taxation system and ensuring that fairness is an underlying value.
To improve our productivity, New Zealand must embrace the opportunities and meet the challenges of the Future of Work. I recently hosted the first Future of Work Tripartite Forum, bringing together representatives of business, workers and the Government to discuss the challenges and opportunities presented by the rapidly changing nature of work.
This includes looking together at how we can improve the use of technology in business, create more productive workplaces, improve the skills and training of our workers and manage a just transition to a low carbon economy.
At our first meeting we endorsed a skills shift initiative in the manufacturing industry to fast-track the training and re-training required for a workforce facing massive technological change. The Government has already heavily invested in the skills and training area through our post-secondary school fees-free education and training programme. Just last week, the Government launched a micro-credentials programme to support short-course industry-led training that is so essential as industries transform.
Along with improving skills and continued immigration to fill skill gaps, technology, innovation, science and research will have significant roles to play in lifting productivity and improving business agility as well. New Zealand’s total investment in Research and Development is only 1.3% of GDP – around half the OECD average.
This Government has set itself a target of helping to lift New Zealand’s private R&D spending to 2% of GDP in ten years.
Minister for Research, Science and Innovation, Megan Woods, is overhauling New Zealand’s R&D regime, including developing an R&D tax incentive to be implemented by 1 April 2019. This will incentivise firms to invest in R&D and give them certainty about their investments.
The second important part of our transition is to be a more sustainable economy. We also have to make the investments necessary to ensure our economy is fit for purpose both now and for future generations.
On the fiscal side of the ledger, that means budgeting for future generations by remaining responsible in terms of how we manage the Government’s books. This includes the restarting of government contributions to the New Zealand Super Fund after a nine-year hiatus. This has begun and will grow over the coming years.
On the policy side, it means a transition to a low carbon economy. We have set the ambitious target of net zero emissions by 2050. I am delighted that business is pursuing these goals as well with sixty of New Zealand’s largest companies coming together as the Climate Leaders Coalition that has committed to reduce emissions and be publicly accountable for that.
This is important not just to play our part in addressing climate change, but in giving New Zealand a credible and long-term base for our economy. This will mean change, but it also represents opportunity.
We are determined this will be a just transition where we support industries and communities to develop new and high-paying jobs. One example is the $100 million Green Investment Fund being established by Climate Change Minister James Shaw to leverage private sector investment to support our transition to a low emissions economy.
The third aspect of our economic plan is for a more inclusive economy where more New Zealanders benefit from economic growth than in the past. Recently, ASB economist Mark Smith noted that many low and middle income New Zealanders felt they had missed out, and were wondering where their pay-off from economic growth had gone, faced with stagnant wages and an increasing cost of living.
We have made significant strides towards addressing this through our Families Package that will lift the incomes of middle and low income New Zealand families by an average of $75 per week when fully rolled out.
It is also why we have lifted the minimum wage, with the target of $20 per hour by 2021, and lies behind the changes we are making to employment relations. I recognise that these moves may not be universally popular but they are about ensuring that wages are rising to meet the cost of living and give working people a fair share and enough to support their families on.
We also want to see New Zealanders, no matter where they live, given the opportunity to flourish. This means investing in our regions through the $1 billion per annum Provincial Growth Fund. This will be a transformative programme to open up economic development and job opportunities right across the country. It includes the One Billion Trees programme, significant investment in regional rail and job creation and training schemes. It is the single biggest investment in the regions of New Zealand in our lifetimes, and as it expands, offers the opportunity of significant partnerships with the private sector.
Our economic plan is about the Government providing leadership and actively supporting businesses to take opportunities and manage the risks of the transition to a modern mid-21st century economy.
In the same spirit we are making changes to the way we prepare and deliver our policies and Budgets.
The title of this address is ‘Budgeting For The Next Generation’. In my remaining time, I want to touch on how this Government is doing things differently, by taking a longer-term approach to our Budget process, policies and investments.
2019 will see the Government deliver New Zealand’s first ever Wellbeing Budget. The Wellbeing Budget is about this Government formulating policy and measuring success differently.
Previous Governments have measured their success by simple measures such as GDP. While it remains an important measure of economic activity, GDP alone does not paint a full picture of New Zealanders’ wellbeing or living standards.
Although the GDP growth we’ve seen in recent years has been the envy of many of our international counterparts, we’ve also seen increases in statistics that would suggest that that growth has not resulted in real tangible improvements to many people’s lives.
We want all the levers within the machinery of government to consider wider wellbeing outcomes, to ensure that everything the Government does is done explicitly to improve the wellbeing of New Zealanders.
In practice, our wellbeing focus begins with the Treasury’s Living Standards Framework (LSF).
The LSF starts from a set of indicators for the current wellbeing of New Zealanders, and for their future wellbeing, based on the stock of the four capitals which determine intergenerational wellbeing: Financial/Physical, Natural, Human, and Social.
This translates to developing our policy and measuring our success by looking at the health of our finances, environment, people and communities.
The Government is currently in the process of putting together its priorities for Budget 2019. Ministers and agencies will have to show how their Budget bids will improve the wellbeing of New Zealanders, based on the Living Standards Framework.
The Budget will also include a Living Standards Dashboard, measuring our success.
By including wellbeing information, the Budget will serve as a broader nationwide stock-take than the traditional Budget, which previously focussed on economic and fiscal information.
My vision is for the Budget to become an annual update showing how we are doing as a nation, as well as the Government’s plan for improving the nation’s wellbeing over the years ahead.
The wellbeing approach to the Budget process is part of taking a longer-term view of the impact of Government policies on the New Zealand economy, and New Zealanders. It’s about budgeting for the future.
In conclusion, I want to return to the comments made by Rob Campbell.
New Zealand is a good place to do business.
Our economic and political system rates highly.
I understand that in business there will always be a wariness of change, but to ensure that our growth is productive, sustainable and inclusive, we all know that change is necessary.
This Government is committed to working with business in partnership on that change. We will work with you to innovate, adapt and prosper, and deliver to New Zealanders the wellbeing and living standards they want and deserve.Wed, 08 Aug 2018 13:54:30 +1200beehive.govt.nz104962